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The Federal Trade Commission is investigating Google CEO Eric Schmidt's potentially improper relationship with Apple, a competitor in the cell phone business. Eric Schmidt, refuses to resign from his directorship at Apple, a company which he has expressed great fondness for.  (Source: Gawker)
Eric Schmidt plans to stand his ground

Google chief executive Eric Schmidt is under investigation by the Federal Trade Commission for his potentially improper relationship with electronics giant Apple.  The FTC believes that Mr. Schmidt's directorships at the two companies, which compete in at least one sector, cell phones, may constitute a breach of antitrust laws.  However, despite the government pressure, Mr. Schmidt refuses to give up his relationship with Apple.

Eric Schmidt invested heavily in Apple over the last decade and on August 28, 2006 he was awarded with a position on Apple's board of directors.  Mr. Schmidt described his love for Apple, stating, "Apple is one of the companies in the world that I most admire. I'm really looking forward to working with Steve and Apple’s board to help with all of the amazing things Apple is doing."

Apple founder and CEO Steve Jobs returned the love, stating, "Eric is obviously doing a terrific job as CEO of Google, and we look forward to his contributions as a member of Apple’s board of directors.  Like Apple, Google is very focused on innovation and we think Eric’s insights and experience will be very valuable in helping to guide Apple in the years ahead."

Over the last few years, as a director at Apple, he has been responsible in part for designating broad policies and objectives, approving budgets, and completing other financial management.  Despite the jeopardy that Mr. Schmidt is currently in, he is fighting to retain his position.

He spoke to reporters at Google's Mountain View Headquarters in California, insisting that the relationship was on level, stating, "If there are issues on competitiveness, I recuse myself.  From my perspective I don't think Google sees Apple as a primary competitor."

When asked if he might quit Apple, he stated "it hasn't crossed my mind."

Also under investigation is Arthur Levinson, former CEO of Genetech, who also serves on both boards.  Google's legal counsel Kent Walker believes that tie is legal, stating, "The law is clear that there is a safe harbour under the Clayton Act for companies that don't have overlapping revenue in different areas, and we're comfortable with that position."

Some shareholders are angry with Mr. Schmidt’s relationship with Apple, though.  Brandon Rees, a representative of a group of major shareholders, states, "There is nothing to gain and a lot to lose. We don't want Google to become an antitrust devil like Microsoft did."

If Mr. Schmidt is found in violation of antitrust laws it would be a major blow for Google.  He would likely have to pick between his two worlds -- his life with Google, and his love for Apple. 



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A good movie
By Diesel Donkey on 5/10/2009 5:15:52 PM , Rating: 5
quote:
He would likely have to pick between his two worlds -- his life with Google, and his love for Apple.


I wonder which movie studio will pick up the rights to this story...sounds like a classic :)




RE: A good movie
By amanojaku on 5/11/2009 1:05:13 AM , Rating: 5
<Cue Don LaFontaine>

In a world where antitrust laws rule...

Apple. Google...

<Cue explosions>
CAN LOVE CONQUER ALL?!? They're gonna find out and put the protector...

<Cue gunshot>

Back in the pocket.

<Cue MPAA rating message>
Rated R for scenes of code merges, compiles, disassembly, and experimental code use. PARENTAL GUIDANCE SUGGESTED. Some material may not be suitable for children and will be banned from the App Store. Suck it.


RE: A good movie
By Rock Hydra on 5/11/2009 9:36:52 AM , Rating: 2
ROFL! That made my morning!


I got rated down for saying this exact thing.
By foolsgambit11 on 5/10/2009 5:27:59 PM , Rating: 4
quote:
There is nothing to gain and a lot to lose.
In the previous article about this, I pointed the same thing out - it is important to avoid the appearance of impropriety. If obviously doesn't benefit Google to have Schmidt on Apple's board (if it did, then there would definitely be something improper going on), and it opens the company up criticism (founded or not).

On the other hand, the fact that Google went into phones at all suggests that Schmidt's association with both companies isn't keeping them from competing at some level. And this article does go into some of the benefits that Apple gets from having him on the board. But what does Google get out of having Schmidt on Apple's board? Doesn't Schmidt have enough to do at Google to keep him busy?

But still, Google could have prevented this investigation by not allowing him to be on both boards. And it is undoubtedly better for the company not to have to worry about a legal investigation.




By foolsgambit11 on 5/11/2009 11:15:56 AM , Rating: 2
It's an effing subject line. Get over it.

Do you have anything constructive to add, or are you just trying to deflect the subject away from discussing good business practices?


By Alexstarfire on 5/11/2009 9:42:06 AM , Rating: 2
I don't know if he has enough to keep him busy or not as I do not run his life, but you can't stop the flow of ideas. Now if he is on Apple's board helping them with business decisions then I would agree with you and say that it makes little sense for him to be on both boards, but if he is part of the creative process in both companies then I don't see a problem. People at Apple could ask him questions that those at Google don't and as such he comes up with something that he never would have even dreamed of if he only worked at Google.

But that is just speculation at best.


By foolsgambit11 on 5/11/2009 11:18:26 AM , Rating: 2
That does make some sense. And I can see Google feeling that the intangible benefits of their CEO expanding his creative horizon outweighed the risk of legal difficulties from his position at Apple. That's how they do business.


Big Love
By bupkus on 5/11/2009 7:30:43 AM , Rating: 4
You want your trophy wife?.. Then you need to divorce the one who brought you there, unless you live in Utah.




By LumbergTech on 5/10/2009 10:27:56 PM , Rating: 2
The Federal Trade Commission is investigated Google CEO Eric Schmidt's potentially improper relationship with Apple, a competitor in the cell phone business. Eric Schmidt, refuses to resign from his directorship at Apple, a company which he has expressed great fondness for.

read the bolded part




He gets what he deserves . . .
By blueboy09 on 5/11/09, Rating: -1
RE: He gets what he deserves . . .
By FITCamaro on 5/11/2009 7:21:18 AM , Rating: 2
And what evil thing exactly did he do?


RE: He gets what he deserves . . .
By icrf on 5/11/2009 7:30:56 AM , Rating: 2
Yeah, I'm confused. They overlap in one market, and that particular market has extremely heavy competition. It really doesn't look like there's anything wrong with it. Or am I confusing anti-trust with monopoly, and things like Android skipping multi-touch support are the real questions?


RE: He gets what he deserves . . .
By omnicronx on 5/11/2009 8:43:54 AM , Rating: 2
If he is on both boards and he is actively part of all decisions of both companies, than he would probably be in the wrong here. By the sounds of it though, he leaves the room when any conflicting topic comes up. I see nothing wrong with this, unless of course someone can prove he is giving away trade secrets, which I really doubt would make sense for him. He is on two boards after all, why jeopardize that? I don't see how he would make more money giving away trade secrets than being on two boards.


RE: He gets what he deserves . . .
By Motoman on 5/11/2009 11:26:08 AM , Rating: 3
...call me crazy, but it seems to me that the reason people are appointed to a board of directors is because the company expects to benefit from their guidance...

...and if you have a director who has to leave the room once in a while when a potentially taboo subject comes up - how is that properly giving the company the direction it expects?

If you were a salaried worker mid-level in the organization, and found it necessary to excuse yourself once in a while from company duties, I can't imagine you'd remain employed very long.


RE: He gets what he deserves . . .
By foolsgambit11 on 5/11/2009 11:29:44 AM , Rating: 2
Yeah, the antitrust issue here wouldn't be abuse of monopoly as much as collusion. I agree that it would be difficult to prove that the consumer was damaged by collusion, or that the companies gained a material advantage in the market.

But I think it's good that the relationship between the companies is investigated to ensure everything is above board. When you are two of the largest software companies on the planet, and you share two board members, it's a good idea to keep an eye on things.


RE: He gets what he deserves . . .
By icrf on 5/11/2009 9:46:07 PM , Rating: 2
In a competitive market, what's the difference between collusion and partnership? The only problem is if they are conspiring in secret to harm the market.


Boredom
By AnnihilatorX on 5/10/09, Rating: -1
"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan














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